DynamicAction Blog

Finding Opportunities Through Turbulent Decline


While it is today’s reality, continuing to operate during this moment of turbulent decline is epically complex and leaves retailers with more questions than answers. This stage is non-uniform across geographies as different regions are battling this pandemic at different stages. It is impacted by a number of factors, including the progression of the health crisis and actions of both governments and health officials. Parts of the United States, the UK and Europe, as well as many other countries across the world are in full lock down for the next few weeks, with all non-essential shops, restaurants, parks and gyms shuttered, and people being asked to not leave their homes unless it is an absolutely necessity. Unemployment is at a historic high. Across Britain and the US economists are forecasting unemployment rising to 21% and 32% of the population’s workforce respectively, surpassing the levels reached during the Great Depression of the 1930s within months. The basic fabric of the economic environment has upended the dispersion of wealth and consumers are allocating a large portion of their wallet share to what they deem as essentials without a defined end date.

With the complete halt of business from the majority of free-standing stores, retailers who are still functioning are serving their customers on a very limited basis and mainly via eCommerce.  Brands are having to swiftly understand the desires of their customer (some newly converted to the digital channel) and must tap into store inventories to fulfill orders.   Our analysis of the DynamicAction Retail Index has shown a vastly varying spectrum of results per trend with a wide range of extremes over the past 12 weeks.  There is a widely contradictory consumer response and an inconsistent undercurrent to retail. What we can say with absolute certainty is that you cannot directly draw conclusions from other retailers. Across the board brands, even well-established businesses that strive to maximize every opportunity, are not succeeding in every aspect of their business. 

During Turbulent Decline, the main objective for retailers will be generating and optimizing cash from available demand, reducing expenses and mitigating inventory risk. There are a number of core strategies that could open up opportunities to drive revenue:

  • Tap effectively into current demand
  • Aggressively promote popular products
  • Markdown unpopular seasonal products
  • Reduce marketing expenses
  • Pullback on inventory buys
  • Focus on best customer retention
  • Consider daily team priorities

In order to push through this current phase , it will be critical to have the workforce focus on:

  1. Programs that entice (retain or reactivate) your most profitable customers to purchase through special content or services.
  2. Markdown unpopular seasonal inventory and eliminate loss making activities based on current demand.
  3. Reduce overall marketing spend and customer acquisition investments.

Retailers who understand the different stages of the current cycle and grasp that decisions and actions will be based on their specific business needs, are the ones who will be able to successfully navigate this new non-normal state towards recovery.  It is imperative to drill down to the brand’s value proposition coupled with a holistic understanding of data from across the business to inform strategy and operations.  There is no room for ‘gut instinct’, because this pandemic has thrown the world into a state that is unlike anything we’ve previously experienced. 

Continue to check back for our data driven Recovery Action Plan.